The Bitcoin ETF is here!
It certainly wasn’t without drama that the Bitcoin ETF finally debuted on January 11, 2024. Ironically, this date marks exactly 15 years since Satoshi and Hal Finney made their first transaction on the bitcoin blockchain (which was 8 days after the genesis block was mined). I won’t bore you rehashing the events of the SEC committing one of the greatest false starts in history, but I will take this opportunity to highlight how ridiculous it is that these “governing organizations” are installed to protect us and (inadvertently, or maybe not) and yet their actions often cause the most harm. Maybe this is part of the reason why I’m so cynical for the Bitcoin ETF overall… but more on that later.
What does this mean for public bitcoin companies?
Personally, and maybe because I’m one of them, I think this is actually better for publicly traded bitcoin companies than the price of bitcoin itself. Not because of the massive inflows of dollars coming into the space, but because of the massive perception lift the entire space has had.
We still had, in 2024, people thinking that the only use case for bitcoin was money laundering. Now, obviously the recent Binance charges, and FTX collapse don’t help with this perception of the bitcoin industry, it’s absurd to think that sound money, mathematically programmed to protect your value only has a neferious use case. Give your head a shake, Liz.
Now, we have a Bitcoin ETF. Notably, we do not have a crypto ETF. We have a Bitcoin ETF. Bitcoin ≠ crypto. The FTX/Binance garbage is mostly cRyPtO related. Not bitcoin.
So, with that out of the way, we have a plethora of newly minted interest into bitcoin (not crypto) with institutions now being inundated with ads and brokers selling them this spot Bitcoin ETF. There is light coming through the door crack here.
As a publicly traded bitcoin company I have heard time and time again “we don’t touch your industry”. I suspect this ETF will change this perception and more institutions will eventually start to “touch my industry”.
What about the price of bitcoin?
First of all – who cares? You lettuce handed bafoon. Were you actually going to sell if bitcoin touched $100k this week? But, I can understand a little bit of dopamine rushing when you see god-candles on the BTC-USD charts. So, what does this Bitcoin ETF mean for the price?
Imo, it already happened. And nothing from here on out. The institutions have been preparing for this for months. While there was massive trading volume on day 1 for the ETF, there wasn’t massive new money flowing into the market on day 1, because it was already there. In fact, it wouldn’t surprise me if there was some market manipulation going on in the background where the funds had price exposure to the price of bitcoin prior to the release of the ETF to capture gains on the price increase over the last few weeks. But, don’t mind my tinfoil hat.
You should be more excited about what this means for the bitcoin you have in self custody. With a Bitcoin ETF I would argue is being cemented as a commodity rather than a security, which is good for those of us that hold real bitcoin.
Should I buy the Bitcoin ETF?
There are very few reasons to own the Bitcoin ETFs. But there are some. Notably, if you are a massive, capital placing institution, garnering other’s money. The ETF might make sense for you.
Second, if you want price exposure to bitcoin in a tax sheltered vehicle. The ETF might make sense for you. However, you should understand the risks of a tax sheltered vehicle.
The fact of the matter is, a Bitcoin ETF is not a good place for the majority of individuals to own price exposure to bitcoin. Forget the fact that you lose all freedom aspects of bitcoin, you are being charged fees for price exposure. That is the most counter intuitive thing I have ever heard in my life!
We have an asset, which is safer and better for you to take full ownership of, which doesn’t cost you anything to take full ownership of, and you are going to pay someone else to take ownership of it!? It’s like paying to have someone store and never deliver you your car when you have a perfectly good garage at home!
In short, Bitcoin (big B, protocol) gives us the ability to store our value in a token (bitcoin) which also happens to give us complete control of our wealth. This means no one can ever take it away, or prevent you from using it. The same is not true of a Bitcoin ETF.